Bharatbhai Ramniklal Sata Prop. of Satyajeet Trading v. Collector & District Magistrate
2009-10-29
D.A.MEHTA
body2009
DigiLaw.ai
Judgment D.A. Mehta, J.—As both the petitions challenge a consolidated order dated 06/01/2009 made by Respondent No. 1 - authority in Case Nos.37 of 2008 and 38 of 2008 both the petitions have been heard together and are taken up for disposal together by this common order. For the sake convenience the facts, to the extent necessary, are taken from Special Civil Application No. 4563 of 2009. 2. The petitioner availed of financial assistance from Respondent No. 2-Bank for business purpose. As the petitioner was not able to discharge the outstanding liability within the specified period action has been initiated by Respondent No. 2-Bank under provisions of the Securitization and Reconstruction of Financial assets and Enforcement of Security Interest Act, 2002 (the Securitization Act) and Rules made thereunder. It is the case of the petitioners that in response to notice under Section 13 (2) of the Securitization Act the petitioners approached Respondent No. 2-Bank and referred to the proposal to settle the account. Admittedly no representation / objections as required by provisions of Section 13 (3A) of the Securitization Act had been filed by the petitioners. Respondent No. 2-Bank therefore applied to Respondent No. 1-authority to render assistance in view of provisions of Section 14 of the Securitization Act. Accordingly vide impugned order dated 06/01/2009 Respondent No. 1-authority issued direction to the Mamlatdar and Executive Magistrate to take possession of the subject assets. 3. The case of the petitioners as propounded by learned Advocate for the petitioners is that while passing impugned order dated 06/01/2009 Respondent No. 1-authority has not issued any notice to the petitioners. It is further submitted that out of four properties in question, one of the properties is partly tenanted, and no notice has been issued even to the tenants. It was further submitted that guidelines issued by the High Court have also not been followed by Respondent No. 1-authority. 4. It appears that petitioner of Special Civil Application No. 4564 of 2009 approached the Debts Recovery Tribunal (DRT) under Section 17 of the Securitization Act. Respondent No. 2-Bank objected to the said appeal and DRT came to the conclusion that in absence of any measures under Section 13 (4) of the Securitization Act, the appeal was not maintainable. 5. The petitioners have challenged the order dated 06/01/2009 by praying for following reliefs. “8.
Respondent No. 2-Bank objected to the said appeal and DRT came to the conclusion that in absence of any measures under Section 13 (4) of the Securitization Act, the appeal was not maintainable. 5. The petitioners have challenged the order dated 06/01/2009 by praying for following reliefs. “8. The petitioner, therefore, prays that :— (A) YOUR LORDSHIPS may be pleased to issue other appropriate writ, order or direction quashing and setting aside the impugned order both dtd. 06.01.2009 made by the Respondent No. 1 in Case No. 37 of 2008 and Case No. 38 of 2008 (Annexure - A Colly) as being unjust, arbitrary, unreasonable, contrary to provisions of an order passed without application of mind and violative of Article 14 of the Constitution of India; (B) YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of both the impugned orders dated 06.01.2009 made by Respondent No. 1 in Case No. 37/2008 and Case No. 38/2008 and further be pleased to restrain the Respondent No. 2 Bank of Baroda, its Officers, Agents and/or servants from taking any coercive action or steps in respect of the subject property pursuant to the impugned orders both dated 06.01.2009 pending the admission, hearing and final disposal of this petition; (C) YOUR LORDSHIPS may be pleased to grant such other and further reliefs as may be deemed fit and proper by this Hon’ble Court, in the interest of justice.” 6. On 11/05/2009 notice was issued by the Court by recording that Respondent No. 2-Bank had approached Respondent No. 1-authority for making an order under Section 14 of the Securitization Act without taking any action under Section 13 (4) of the Act. That as DRT had dismissed the appeal as being not maintainable the petition had been preferred. 7. It is also necessary to record that during pendency of the petitions the petitioners made an offer to discharge their liability by handing over possession of one of the properties which was tenanted but after considering the offer Respondent No. 2 –Bank has chosen not to accept the offer. 8.
7. It is also necessary to record that during pendency of the petitions the petitioners made an offer to discharge their liability by handing over possession of one of the properties which was tenanted but after considering the offer Respondent No. 2 –Bank has chosen not to accept the offer. 8. Insofar as challenge to action under Section 14 of the Securitization Act is concerned this Court has held consistently that any action under Section 13 (4) of the Securitization Act is open to challenge under provisions of Section 17 of the Securitization Act and in the circumstances authority acting under Section 14 of the Securitization Act is not required to act beyond the scope of provisions of Section 14 of the Act by usurping adjudicatory power available to DRT under Section 17 of the Securitization Act. Section 13 which deals with enforcement of security interest provides for in Sub-section (4) thereof that in a case where the borrower fails to discharge the liability in full within the period specified in Sub-section (2) of Section 13 of the Securitization Act, it is open to the secured creditor to take recourse to any one or more of the measures set out in clauses (a) to (d) of the said Sub-section to recover the secured debt. Clause - (a) of Sub-section (4) of Section 13 of the Securitization Act permits secured creditor to take possession of the secured assets of the borrower. Section 14 of the Securitization Act provides for rendering of an assistance to a secured creditor by the authority named in said provision for the purpose of taking possession of any secured asset by the secured creditor. 9. This view has been upheld by the Division Bench of this High Court in judgment rendered on 20/02/2009 in Letters Patent Appeal No. 1472 of 2008 in the case of Satyendra Singh Gupta (HUF) & Anr. vs. Authorized Officer. Similar is the view expressed by the Apex Court in the case of Transcore vs. Union of India & Anr., reported in (2008) 1 SCC 125 as well as in the case of Authorized Officer, Indian Overseas Bank vs. M/s. Ashok Saw Mill reported in AIR 2009 SC 2420 . 10.
vs. Authorized Officer. Similar is the view expressed by the Apex Court in the case of Transcore vs. Union of India & Anr., reported in (2008) 1 SCC 125 as well as in the case of Authorized Officer, Indian Overseas Bank vs. M/s. Ashok Saw Mill reported in AIR 2009 SC 2420 . 10. Thus in light of the settled legal position the petition is not required to be entertained in light of the fact that Section 17 of the Securitization Act is a complete answer and is a self-contained Code in relation to any action taken under provisions of Section 13 (4) of the Act. 11. In the circumstances it is not necessary to deal with the High Court judgments cited on behalf of the petitioner in the case Kalyanji Sales Company & Anr. vs. Union of India & Anr., reported in (2006) BC 1 (DB) Punjab and Haryana High Court and in the case of Subhash Chandra Panda vs. State of Orissa & Ors., reported in AIR 2008 Orissa 88 as none of the judgments have referred to the Apex Court decision or judgments rendered by this Court. Reliance on the case of Dena Bank vs. Shri Sihor Nagarik Sahakari Bank Ltd., & Ors., as reported in 2008 (2) GLR 1796 is also misplaced inasmuch as this is not a case where there is any dispute in relation to extinguishment of any tenancy right. 12. Insofar as the contention based on Rule 8 of the Security Interest (Enforcement) Rules 2002 (the Rules) is concerned, suffice it to state that the notice referred to in Sub-rule (1) of Rule 8 of the Rules is a Possession Notice and the same cannot equated with a notice envisaging an opportunity of hearing prior to making an order under Section 14 of the Act. The use of phrase “possession of immovable property is actually taken by the authorized officer” in Sub-rule (3) of Rule 8 of the Rules also cannot assist the case of the petitioner for the simple reason that the Possession Notice referred to in Sub-rule (1) of Rule 8 of the Rules has to be in the form prescribed in Appendix IV of the Rules.
A plain reading of the said form makes it clear by use of the following words in paragraph No. 2 of the notice that the notice has to be issued at the stage when possession has already been taken over. “The borrower having failed to repay the amount, notice is hereby given to the borrower and the public in general that the undersigned has taken possession of the property described hereinbelow....” 12.1 The notice is a possession notice and not a notice for possession. In other words the notice is both to the borrower and to the public in general that the authorized officer has taken possession of the property described in the notice. As laid down by the Apex court in the case of Transcore (Supra) in paragraph No. 73 “The word possession is a relative concept. It is not an absolute concept. The dichotomy between symbolic and physical possession does not find place in the Act.” Therefore, the reliance on the phrase in Sub-rule (3), referred to herein before, also cannot help the petitioners. 13. At this stage learned Advocate for the petitioners invited attention to paragraph No. 13 of the order dated 10/09/2009 in the case of Purshottam D. Somani vs. Authorized Officer & Anr., in Special Civil Application No. 9010 of 2009 and cognate matter to submit that it be held that the DRT had committed an error in dismissing the appeal by observing that Respondent No. 2-Bank had not taken any steps under Section 13 (4) of the Act. In the first instance the petition has not challenged the order made by DRT and therefore it is not open to go into the said aspect of the matter. Secondly the position in law is very clear and it is not necessary for the Court to make any further observation. 14. In the circumstances there is no legal infirmity in the impugned order made on 06/01/2009 by Respondent No. 1-authority and hence the petitions fail and are accordingly rejected. Notice discharged. There shall be no order as to costs.